What Is the Relationship between Human Resources and Competitive Advantage?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 19 October 2019
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The relationship between human resources and competitive advantage is the fact that an efficiently implemented human resources management regime can be leveraged to the competitive advantage of a company. Competitive advantage refers to the various strategies a company can implement that will give it a competitive edge over rivals within that industry or other related industries. Human resources can be used in various ways to achieve this desirable competitive edge. Hiring the right employees to meet company goals, grooming the employees within a company, and providing the employees with attractive benefits are all examples of how human resources and competitive advantage are connected.

The human resource department is responsible for the identification of the manpower requirements in firms and the engagement of competent employees to fill those vacancies. During the establishment of companies goals and targets are visualized, and in order to realize these goals the company must hire the right mix of employees who can help the company in its quest. Successfully hiring employees with the desirable human capital is one of the links between human resources and competitive advantage. A company with the right staff will be able to tap into the wealth of knowledge and experience reposed in the human elements of the corporation to boost performance and gain a competitive edge over companies with less qualified workers.


Another way in which human resources and competitive edge are related is the fact that the human resources department can channel company resources toward grooming and developing the human capital base of the company in alignment with the particular requirements of the company. This practice includes features like trainings, courses, seminars, personal development programs and conferences, which will be sponsored by the company. The aim of this type of human capital development is to instill the vision of the company in employees with the hope that they will channel the company’s delineated strategies for competitive advantage.

Most of the trully successful companies have a well-developed human resources department with an established strategy for attracting and, most importantly, retaining employees. Companies that do not have a really good employment practice will find themselves losing their most valued and skilled workers to competitors offering better employment packages. This connection between human resources and competitive advantage includes factors like attractive wages and other financial compensation, the reasonable guarantee of employment security, and the promise of further development of employees through company-sponsored training and personal development programs. Good welfare packages, health insurance and an inclusive organizational corporate culture also help a firm solidify its human capital base, which may be applied toward competitive advantage.


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